Iron Horse Acquisitions Corp. has announced the close of a nearly $70 million IPO. Photo Credit: Vladimir Solomianyi
Who says special purpose acquisition companies (SPACs) are dead? Iron Horse Acquisitions Corp. has announced the close of a $69 million IPO and set its sights on scoring a deal – or deals, bearing in mind the plurality of “acquisitions” – in the media and entertainment spaces.
Iron Horse (NASDAQ: IROH) just recently disclosed the $69 million IPO, consisting specifically of 6.9 million units (800,000 of which will “cover over-allotments”) priced at $10 apiece, via a formal release. As described by the business, each of these units consists of one common stock share, a full warrant, and the right to receive another fifth of a share “upon the consummation of an initial business combination.”
Founded and led by Bengochea Capital’s Jose Bengochea, the SPAC in October reportedly shelved plans for a $100 million (and 10-million-unit) IPO. (The SPAC’s sponsor, Bengochea SPAC Sponsors I, has itself bought about $2.5 million worth of warrants at $1 each, and the overarching Bengochea Capital has emphasized that it’s “a registered media entity with the Recording Academy.”)
Now, equipped with a still-sizable tranche, the company is poised to explore purchases in several areas, among them “production studios, celebrity-backed content creators, talent-facing consumer products,” fantasy-sports operations, talent firms, “social media marketers,” AI startups, and gaming businesses, per the SPAC’s own description.
Particularly on the music side, Iron Horse has relayed that it may also scoop up “music rights aggregators, music licensors, international music labels, [and] K-POP” companies.
Besides the aforementioned Bengochea, the multimillion-dollar SPAC’s executive team includes longtime C-suite professional Bill Caragol (COO) and roughly three-decade Twentieth Century Fox finance higher-up Jane Waxman (CFO), with RealNetworks, Coinstar, and PricewaterhouseCoopers vet Brian Turner serving as chairman.
Further highlighted in Iron Horse’s lengthy prospectus is the possibility of legal action from the SPAC’s former underwriters. The entity “may become subject to a legal dispute if its prior underwriters…seek to enforce their now-terminated right to purchase 200,000 shares and 750,000 private warrants in connection with the consummation of this offering,” the text drives home.
Meanwhile, the SPAC’s founder – that is, the above-noted Bengochea SPAC Sponsors – possesses some 1,964,200 shares that were nabbed for a total of $25,000, the prospectus shows.
Especially given the possible focus on the music industry, it’ll be worth keeping an eye out for Iron Horse’s buyout target(s), which must be acquired within 18 months from now, according to the company’s prospectus.
Potentially significant trends in the broader SPAC arena should also prove interesting to monitor during 2024. As we reported, a number of SPACs, including many that had hunted for plays in and around the industry, wound up in 2022 and 2023 after failing to wrap deals.
But last year likewise delivered a few new arrivals and mergers in the music-SPAC community, the most recent (prior to Iron Horse) being artist-centric social platform Fenix 360’s $610 million merger with DUET Acquisition Corp.
